China says it has imposed additional 15 per cent tariffs on U.S. chicken, wheat, corn and cotton imported into the country.Charlie Neibergall/The Associated Press
Defying new U.S. tariffs that came into force this week, Beijing on Wednesday set an annual GDP growth target of “around 5 per cent,” unchanged from the year before, despite an escalating trade war between the world’s two largest economies.
Minutes after new U.S. tariffs came into force against a slate of Chinese goods Tuesday, Beijing responded by imposing 10- to 15-per-cent levies against U.S. agricultural goods.
Additional 15-per-cent tariffs will be imposed on U.S. chicken, wheat, corn and cotton, while sorghum, soybean, pork, beef and other foodstuffs will be subject to 10-per-cent tariffs, China’s State Council said in a statement.
Addressing lawmakers in Beijing on Wednesday, Chinese Premier Li Qiang acknowledged “international pressure” on trade, but added “there is no difficulty that China cannot overcome.” Earlier, a Foreign Ministry spokesperson, Lin Jian, said Beijing “will play along to the end” if Washington is intent on waging a trade war.
“Trying to exert extreme pressure on China is a miscalculation and a mistake,” Mr. Lin said.
In addition to the new tariffs announced Tuesday, China also placed 25 U.S. companies under export and investment restrictions on national-security grounds.
The measures were in response to a new 10-per-cent tariff on all Chinese goods imposed by President Donald Trump early Tuesday, on top of across-the-board 10-per-cent tariffs enacted against China after his administration came to power in January.
In an executive order, Mr. Trump said the new measures were being taken due to the “unusual and extraordinary threat” caused by fentanyl and other synthetic opioids flowing into the U.S., and “the failure” of Beijing to blunt this.
In response, China’s Commerce Ministry vowed in a statement to “take countermeasures to firmly safeguard its own rights and interests.”
The statement pointed to years-long co-operation between the U.S. and China on tackling drug flows. Indeed, in his final bilateral meeting with Chinese leader Xi Jinping, former U.S. president Joe Biden hailed this issue as a rare point of success in Sino-U.S. relations.
But the new U.S. measures would “seriously undermine bilateral dialogue and co-operation in the field of drug control,” said Mr. Lin
Mr. Lin reiterated China’s long-standing position that the “root cause” of the opioid crisis “lies in the U.S. itself.”
Beijing has threatened to take the case to the World Trade Organization, with the Commerce Ministry saying the new measures will “undermine China-U.S. economic and trade co-operation and the normal international trade order. China urges the United States to respect the rights and interests of other countries and immediately withdraw its unreasonable and unfounded unilateral tariff measures that harm others and itself.”
Mr. Trump’s order came hours after his top trade representative delivered a new agenda to Congress promising “a trade policy for the next great American century.”
That document describes China as a “the single biggest source of our country’s large and persistent trade deficit and a unique economic challenge.”
“In his first term, President Trump negotiated a historic and enforceable Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China (also known as the Phase One Agreement),” the agenda notes. “However, there has been no action taken to enforce the agreement where China has not lived up to its commitments.”
It adds the U.S. Trade Representative, Jamieson Greer, “will assess China’s compliance with the Phase One Agreement.”
Mr. Greer is a protégé of Robert Lighthizer, Mr. Trump’s trade representative in his first term, and a strong supporter of tough tariffs on China for both economic and national security reasons.
Testifying before the House ways and means trade subcommittee last year, Mr. Greer said it was “critically important” to restore U.S. manufacturing “to ensure that the U.S. can credibly deter escalation by China and, if necessary, defend its national-security interests at home and abroad.”
He added he did “not subscribe to the myth that more trade reduces the likelihood of conflict.”
However, the U.S.-China Business Council, which represents American companies in China, warned the new tariffs “will hurt U.S. businesses, consumers, and farmers and undermine our global competitiveness.”
USCBC president Sean Stein urged “the two governments to engage in broad-based negotiations to address fentanyl and other important issues, including challenges to selling U.S. goods and services in China’s market and striking a deal that enhances U.S. national security and competitiveness and grows the American economy.”
Even before Mr. Trump restarted a trade war with Beijing, the Chinese economy had been struggling, weighed down by a lacklustre recovery from the COVID-19 pandemic, structural issues around debt and housing supply and a looming demographic crisis.
“China faces serious socioeconomic challenges at home, and recent global developments have added to the political uncertainty,” Nis Grünberg, lead analyst at the Berlin-based Mercator Institute for China Studies, said last week.
With reports from Reuters and Alexandra Li in Beijing